Net Element, a provider of global mobile payment technology
solutions and value-added transactional services, today opened its books for
the fiscal year ended December 31, 2014, reporting among other things an
increase in annual revenues, a significant reduction in debt, and several
corporate milestones.
The adjusted loss from continuing operations for the year
2014, including special items, was $6.9 million, or a loss of $0.19 per share,
as compared to an adjusted loss from continuing operations of $19.4 million or
a loss of $0.68 per share, for the year ended December 31, 2013. Fiscal year
2014 net revenues were $21.2 million, as compared to $18.7 for the year 2013.
The company attributes the year-over-year increase primarily to an increase of
$4.6 million in transaction processing revenues offset by $2.1 million of
reduced Russian mobile payment processing revenues connected with the
restructuring of the company’s Russian business.
Cash provided by operating activities of continuing
operations was $2.3 million for 2014 compared to cash used in operating
activities of $9.8 million for 2013. Positive operating cash flow for 2014 was
primarily due to the $7.9 million reduction of accounts receivable and
aggregator advances offset primarily by $1.3 million of increases in accounts
payable and accrued expenses.
Total liabilities were $8.8 million at December 31, 2014,
compared to $37.9 million at December 31, 2013. Net Element reduced its total
debt by $27.7 million to $3.3 million at December 31, 2014. In the fall of
2014, the company completed a debt exchange program which eliminated $15.9
million in debt obligations. Per the terms of its convertible debt agreement,
Net Element converted $11.2 million of debt to equity upon obtaining a new $10
million credit facility. Additionally, Net Element’s factoring lines were $0 at
December 31, 2014, as compared to $8.5 million at December 31, 2013.
The company highlighted several milestones in 2014 and into
2015, including:
• Improved
access to credit to implement strategic initiatives; secured new financing of
$10 million, triggering conversion of $11 million of debt to equity
• Advanced
service offering expansion by agreeing to acquire mobile payment technology
innovator PayOnline
• Reorganized
mobile payments business to achieve positive operating cash flow
• Positive
working capital allowed self-financing of growing mobile payments business
• Migrated to
proprietary billing system for mobile business operations
• Mobile
payments business exceeded 1 million recurring mobile subscribers in the month
of January 2015
• Eliminated
$15.9 million of debt obligations through a debt-to-equity swap
• Reduced
G&A expenses by $5 million, including $1 million in salaries and $2 million
in professional fees
• Announced
Apple Pay™ availability in company’s U.S. POS terminal network
• Enhanced
board with appointment of financial services veteran William Healy and payments
technology industry veteran Drew Freeman
Net Element anticipates continuing this momentum with
several initiatives set for 2015, including:
• PayOnline
closing and integration
• Mobile
payments expansion into Middle East and India
• Expand
Russia service offerings
• Creation of
omni-channel, payments-as-a-service platform that can be profitably adapted to
local businesses globally
Now that we have strengthened our balance sheet by
eliminating most of our debt and created a restructured operational foundation,
we can advance our plan to grow market share, accelerate sales and expand
profitability,” Oleg Firer, Net Element CEO, stated in the news releae. “Our
growing traditional and mobile technology base, our strengthened balance sheet
and strategic emphasis on Small to Medium Enterprise (SME) are competitive
advantages that we expect to capitalize on during 2015.”
For more information visit www.netelement.com
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